Hartford Acc. & Indem. Co. v. Major, Gen. No. 66--20

• Decision Date: 19 April 1967
• Docket Number: Gen. No. 66--20
• Citation: 226 N.E.2d 74,81 Ill.App.2d 251
• Parties: HARTFORD ACCIDENT AND INDEMNITY COMPANY, Plaintiff-Appellee, v. Hugh MAJOR, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 74

226 N.E.2d 74

81 Ill.App.2d 251

HARTFORD ACCIDENT AND INDEMNITY COMPANY, Plaintiff-Appellee, v. Hugh MAJOR, Defendant-Appellant.

Gen. No. 66--20.

Appellate Court of Illinois, Fifth District.

April 19, 1967.

Ralph T. Smith, Alton, for appellant.

Chapman & Strawn, Granite City, Norman H. Kinder, Jr., Granite City, of counsel, for appellee.

GEORGE J. MORAN, Presiding Justice.

Defendant appeals from a judgment for the plaintiff in its suit against the defendant for unpaid insurance premiums and against the defendant on his counterclaim for the return of overpayments. The case was heard by the court without a jury.

The plaintiff, Hartford Accident and Indemnity Company, hereinafter referred to as Hartford, is engaged in the general insurance business. Its complaint alleged that it had issued four insurance policies to the defendant, Hugh Major, hereinafter referred to as Major, the sole proprietor of a trucking business: A workmen's compensation policy, which remained in effect for one year (WH257042); a renewal workmen's compensation policy, which was cancelled by Hartford five months after its issuance (WH105593); a general automobile liability policy, which was cancelled by Major (C244534); and a general liability policy, which covered Major's business premises and which was also cancelled by Major (C224755).

Concerning the two workmen's compensation policies, the evidence indicates that no claim for premiums was made until June, 1962, fifteen months after the first policy had been issued and three months after the renewal policy had been issued. At that time, Major received a premium statement, which was based upon an audit by Atwell, Vogel & Sterling, insurance auditors. Major immediately objected to the statement, contending that he as not liable for the premiums claimed under the workmen's compensation policies because these premiums were based on the earnings of drivers of leased equipment who were not as a matter of law, his employees and therefore were not intended to be included within the coverage of the policies.

Major is licensed by the Interstate Commerce Commission to transport goods for hire in interstate commerce and is also licensed by the Illinois Commerce Commission. All of the tractors he used in his business were owned by other individuals or companies and were used by him under the terms of written lease agreements entered into between him and the respective owners. The trucks in each case were leased with the drivers. In some instances, the drivers operated their own equipment; in other instances, they operated equipment owned by the lessors. When they operated equipment owned by the lessors, they were paid by the lessors.

The evidence on behalf of Major disclosed that the drivers could make deliveries by any route they chose; that they could hire other persons to drive their trucks without any objection by Major; that they could trip lease to other carriers whenever Major could not arrange jobs for them; that the leased drivers were also required to pay for repairs, gasoline, oil, tires, equipment, and licenses; that they were paid by the job, not on a time basis; that they did not receive a payroll check from Major, but that the money 'received from Major was on truck lease statements'; that they paid the collision insurance on their vehicles; and that Major did not withhold any income tax from the money which he paid to them.

Major argues that the foregoing evidence proves that the drivers in question were, as a matter of law, not his employees, but were independent contractors if they drove their own equipment, and employees of independent contractors if the equipment was owned by the lessors of Major.

Hartford contends that one or more of the following furnish an evidentiary basis for finding that the drivers in question were employees of Major:

The last sentence of paragraph 13 of the lease contract reads: 'LESSEE reserves the right to cancel this agreement forthwith if equipment is not maintained and operated to the satisfaction of LESSEE.'

Plaintiff's Exhibit No. 276 is a Truck Lease Statement issued by Major to which the following note was attached: 'If your logs are not up to date within 3 days or have not been corrected, your paycheck will be held.'

Plaintiff's Exhibit 271 is also a Truck Lease Statement issued by Major to which the following note was attached:

On your logs you must show in Line 4, on duty not driving, all time spent loading and unloading, when you are required to remain with the vehicle. Your logs will be checked against the shipping order, and must agree with same.

Plaintiff's Exhibit 317 was a notification by Major to all drivers and reads as follows:

We want to call your attention to the fact that we must know where you are at all times. In most cases we expect delivery of loads the following morning. If this cannot be met, you must call us. You may call 24 hours a day.

Drivers have been driving thousands of miles unnecessarily due to the fact they are not calling us when they are unloaded.

In no case should you ever take a load from Waukegan, Illinois without this office first dispatching you. It means dollars both to you and the company to follow this pattern.

You must never in any case trip lease without first calling the office. Also when trip leasing for M. C. Slater, Scherer Freight Lines, Thru-Way Motor Transport, etc., you must furnish a copy of each days trip lease for both companys.

Plaintiff's Exhibit 318 reads as follows:

Beginning February 27, 1961 dispatching of trucks to load at Johns Manville in Waukegan will be handled from the Wood River Terminal.

Each driver will be required to load his own load, except in some cases Smitty's Spotting Service will load rush loads on spare trailers we have in Waukegan.

When you reach the Waukegan Area--phone the Wood River Terminal and you will be given your instructions.

In no case are you to call Johns Manville or any other shipper in the Chicago area.

If we have no load for you--try to wildcat a load for another carrier--if you are successful in getting a load notify the Wood River office of your destination.

Hartford argues that these exhibits indicate at least six ways in which Major controlled the drivers: (1) The sweeping language used in paragraph 13 of the Lease Contract was equivalent to a provision that Major had a right to fire the driver; (2) by the note attached to Plaintiff's Exhibit 276, he could withhold their checks; (3) by Plaintiff's Exhibit 271, he required them to show how their time was spent while on trips; (4) by Plaintiff's Exhibit 317, the drivers could never trip lease without first calling the office; they could never take a load out of Waukegan, Illinois, without first being dispatched by the office; (5) by Plaintiff's Exhibit 318, the drivers could not call Johns-Manville or any other shipper in the Chicago area; and (6) he told them where to load and unload.

In Coonty v. Industrial Com., 19 Ill.2d 574, at 577, 169 N.E.2d 94, at 96, our Supreme Court said:

When previously confronted with similar issues, this court has consistently pointed out that there can be no inflexible rule which may be applied in all situations to determine whether one is an employee or an independent contractor, and have held that the answer in each instance depends upon the analysis of the facts of the particular case. Henry v. Industrial Com., 412 Ill. 279, 106 N.E.2d 185; Kijowski v. Times Publishing Corp., 372 Ill. 311, 23 N.E.2d 703. No single facet of the relationship between the parties is determinative, but many factors, such as the right to control the manner in which the work is done, the method of payment, the right to discharge, the skill required in the work to be done, and the furnishing of tools, materials or equipment have evidentiary value and must be considered. Henn v. Industrial Com., 3 Ill.2d 325, 121 N.E.2d 492. Of these factors, the right to control the work is perhaps the most important single factor in determining the relation (Crepps v. Industrial Com., 402 Ill. 606, 85 N.E.2d 5), inasmuch as an employee is at all times subject to the control and supervision of his...